US has had record shipments of cotton supporting a stronger US export forecast at 15.25 million bales (Mb), despite a drop in production by 5 Mb from previous year. Latest USDA report says, China accounted for almost half of US exports in the first five months, with the country’s total imports forecast at 10.5Mb bales, highest in seven years.
Moreover, China’s consumption is expected to recover 5.5Mb from the previous year and reach 38.5Mb, accounting for more than one-third of world use in 2020-21. China demand for US cotton has been mostly led by the State Reserve and State-owned Enterprises (SOEs), which accounted for over three-fourths of total imports of US cotton thus far in 2020/21.
Despite US prices being higher compared to Brazil and India (second and-third-largest exporters forecast in 2020-21), US sales and shipments to China through December exceeded previous year by more than 2.3Mb. Australia, another significant supplier to China, witnessed exportable supplies decimated by a 2020 drought. Like the US, Australia is a significant supplier of high-quality cotton to the world’s largest importer.
US exports are boosted this month and forecast to be mostly unchanged from the previous year due to a historic pace for shipments and resilient China demand, despite fewer shipments and sales to Vietnam and Bangladesh.